Shivam Arjundas and Satish Mohite, residents of Parel, were arrested on Tuesday and a country-made revolver and four bullets seized from them.
Sheikh had allegedly transported the explosive material, RDX, to Mumbai after it landed on the Gujarat coast in the early 90s.
Thirty-one persons convicted in the 2002 Sardarpura riot case of Mehsana district on Monday withdrew their regular bail plea from the Gujarat high court.
He was arrested near Tilbitha railway station in this district, the police said on Sunday.
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